Whether you’re a new mum considering child care or you’re already part of the system, the Turnbull Government’s new child care package next year will overhaul the subsidy scheme to deliver more support for more families.
With each family affected differently, it’s important you understand what it will mean for you depending on your circumstances.
The new Child Care Subsidy – in a nutshell.
You may be all too familiar with the complexity of accessing two different payments under the current system, especially if you have more than one child in care.
Under the new package, the current Child Care Rebate and Child Care Benefit will be replaced by a single Child Care Subsidy. We will subsidise the cost of your child’s care and pay the new subsidy directly to the provider, meaning you only pay the difference.
There are three factors that will determine how much Child Care Subsidy you can receive:
- Your combined family income – how much your family earns will determine the percentage of subsidy you are eligible for.
- Your activity level – this will include a number of activities including work, study and volunteering.
- The type of child care service your family uses – whether it’s centre-based care, family day care or outside school-hours care.
If your family earns $185,710^ or less per year, we’re getting rid of the current $7,613 rebate cap that hurts so many family budgets before the end of each financial year. If your family earns more than this (up to $350,000^), the rebate cap will be lifted to $10,000^ per child, per year.
Breaking down the activity test.
As we have now, there’s an activity test. The number of hours of subsidised child care will be more closely aligned with how much ‘approved activity’ parents undertake per fortnight.
The more activity you do, the more hours of subsidised child care you can access - up to 100 hours per fortnight per child. Hours of subsidised care will be determined by the parent with the lowest hours of activity.
But what if you, like many other new parents, are not participating in paid work? What if you’re on maternity leave, or interested in pursuing a new training course, or even doing some charity work? Well the good news is that these are all recognised activities that count toward the activity test.
The broad range of recognised activities means you can maximise your child care subsidies by taking on extra shifts at work or giving back to your local community by volunteering. The list of activities will include, but is not limited to:
- Paid work, including annual leave
- Paid parental leave, including both maternity and paternity leave
- Being self-employed in your own business
- Doing unpaid work in the family business
- Training courses to improve your work skills or employment prospects
- An approved course of education or study
- Actively looking for work
Below is an outline of the hours of subsidised care per fortnight you may be eligible to receive, based on your hours of recognised activity:
If you’re doing more than one activity – it all counts.
We all know that mums today wear (too) many hats – and dads too. In fact, it wouldn’t be uncommon for you to be doing any number of these activities. So some more good news – the activities can be combined, so if you work part-time and study both will be recognised. The hours of activity you undertake don’t need to coincide with your child care hours, so if you work on the weekend, you’ll still able to access subsidised care during the week.
What if my activities don’t meet the activity test?
Other activities that do not fall into these categories will be assessed on a case-by-case basis. If your family earns $65,710^ or less a year, and you do not meet the activity test, you will be able to access up to 24 hours of subsided care per child per fortnight, as part of the Child Care Safety Net.
LISTEN: Amy on being a mum AND a ballerina. (Post continues below...)
How can I find out how much subsidy my family will receive?
Although the changes don’t come into effect until July next year, you can plan ahead by visiting www.education.gov.au/ChildCare to get an estimate of how much child care subsidy you may be able to receive.
^ These figures will be increased by the Consumer Price Index (CPI) when the package begins in July 2018.
Simon Birmingham has served as a Liberal Party Senator for South Australia since May 2007 and in September 2015 was appointed as Minister for Education and Training. He has two young daughters and his family have been part of the child care system.